#77. Morrow Soft Goods makes luxury textiles and soft products for the home. We talk with co-founders Michelle Toney and Stephanie Cleary about building a brand that marries high-end materials with design that has a soul. The Loose Threads Podcast features in-depth discussions with leaders across the rapidly changing consumer economy.

Check out the full transcript below.

Richie: [00:00:07] Welcome to the 77th episode of the Loose Threads Podcast, a show about the rapidly changing consumer economy. This episode is brought to you by Loose Threads Membership, which gives you actionable analysis, insights and events that drive growth, and Loose Threads Espresso, your energizing and high-pressure filter for consumer news—in context. We also have a newsletter that features the latest open letter to CEOs, podcasts with industry leaders and news from Loose Threads. Check it all out at LooseThreads.com.

Richie: [00:00:35] Joining me today are Michelle Toney and Stephanie Cleary of Morrow Soft Goods, a brand that makes luxury textiles and soft products. Michelle and Stephanie started the brand after searching for home products that married high-end materials from around the world with an aesthetic that has a soul.

Stephanie: [00:00:49] You can still have fun in your home. I know you’re investing into these pieces. Not everything has to be white, grey or beige. You can add pops of color into it.

Richie: [00:01:02] They bring an exacting focus to the products they develop and have a growing range of flexible yet personal products to fill up the home. Here is my talk with Michelle Toney and Stephanie Cleary.

Richie: [00:01:15] Why don’t we just start. You can both talk a bit about your background then we can work our way up to Morrow existing.

Stephanie: [00:01:19] So, in my background, I have about 12 years of experience in the apparel, the fashion industry, where I definitely learned about product design pretty much from beginning to end. Especially working in LA, they expect you to know every aspect of it, design down to costing down to production. The beauty about LA is that you actually can go to factories right away and problem solve. So I’ve always learned that pretty much anything is possible and I can fix it as long as I have the right thinking cap and aspect to that. Also, within fashion, a lot of it is overseas. So I’m able to develop and design things both locally and overseas and have been very flexible with that aspect.

Michelle: [00:01:59] So my background is in architecture. I have a Masters of Architecture which is why I originally moved to LA, to go to SCI-Arc [Southern California Institute of Architecture]. I practiced a little bit. I taught, primarily, for about five years after I finished my Masters. I think something, that Steph maybe didn’t mention, [is] that we both feel about our previous professions is they’re challenging lifestyle-wise. So I think fashion and architecture have reputations of being slightly masochistic and for no good reason. So I think architecture is something I always struggled with on that level. I love teaching. Practice was harder for me to want to see as my life and my lifestyle. And so moving beyond architecture was something that I just saw for myself, actually, pretty early on. I would say [that] while I was in school. But that’s definitely my background. I still absolutely love architecture, draw a lot of inspiration just from that field and from design in general.

Richie: [00:02:51] So you were working in architecture. You were working in fashion. Did you know each other at that point? How did this whole thing start?

Michelle: [00:02:57] I met the Clearys through my husband who was friends with—I don’t know how long or when you guys met. You knew each other for a long time, before you met Scott. So then we were friends. I’d say the four of us would hang out well before we started the company, actually.

Richie: [00:03:11] Okay, so you all knew each other when you were working in your respective fields. And then what is the beginning, first inkling of this company starting?

Stephanie: [00:03:19] When me and Michelle talked about this, I think we both knew that we wanted to create a product. In the beginning, we had some other ideas and then it kind of just—I hate saying this—but it kind of just happened organically. I feel like both Michelle and I are definitely hustlers and go-getters. We came up with this idea of doing home things and making sure that—taking more of a fashion approach to it. Always having your classic staple pieces but then, obviously, also adding some pops of color, a little bit more fashion-forward items that make homewear exciting and more compelling and constantly being able to dress your room in different ways and have almost movable pieces. One of the first ideas I came up was accent pillowcases. Having the pop of color and being able to brighten up a room but, if you’re tired of it, you could add a different color to it. So that versatility and still having fun but not too cool or it gets too difficult. I think that’s where we realized that’s what we wanted to do. And then it just happened. We just took that idea, came from a dinner and then we just ran with it.

Richie: [00:04:22] And so what year was that?

Michelle: [00:04:23] So that was 2014. That was about three years ago. We had worked on concepting the business, I’d say, for about a year and a half to two years before we actually launched and then we launched October 2016. So, yes, it completely happened organically. When we were talking about this—it’s an interesting thing because I think we both had the inkling to be entrepreneurs. We’ve had that desire. We, I think, even knew we wanted product companies but there were a million different ways this company would have never happened.

Richie: [00:04:51] Talk through those.

Michelle: [00:04:52] It’s not like if Steph wasn’t on board I wouldn’t have just been like, “Well, I’m doing this. It’s my pure vision.” And, I think, same for you. It wouldn’t have just happened. So, in that way, I think we’re lucky that it was truly collaborative from the start and we knew we needed each other to actually do it because we have such complementary skill sets that it wouldn’t have been possible with just—well I shouldn’t say it wouldn’t have been possible—but it would have been much more challenging with just one or the other. And I think, when we first started, the way we started was we just started meeting once a week. We had the idea. We thought, “Okay, I can’t stop thinking about this. We should actually make progress on it.” So we actually just, I think, we’re both really committed and diligent from the jump and that’s it. So then we started thinking, “Okay, if we wanna actually do this, how do we get there?” And that’s it. All of a sudden, you’re launching a company. It feels much easier in retrospect. It was a lot of hard work and there were so many questions of like, “What do we launch with? What is our product line? Where do we get these things?” But it came together.

Richie: [00:05:50] So you’re meeting once a week. Do you have your other jobs still?

Michelle: [00:05:52] Absolutely.

Richie: [00:05:53] Yeah. Still having them.

Michelle: [00:05:56] Both of us did.

Richie: [00:05:56] As you look back, what were some of the more interesting discussions you were having at that time that were, either very formative about where it turned out, or incredibly naive and foolish given where it turned out?

Michelle: [00:06:04] There were a lot of those discussions. We definitely were not fully aware of the competitive landscape. I don’t say that in a naive sense. In 2014, as we were concepting this, I think a lot of other similar businesses were also being born. And that part, as I saw other entrants in the marketplace, while we had not launched yet, I was nervous about that and it made me uncomfortable. And Steph’s background in fashion and particularly in premium denim, she’s like, “Who cares? There’s a million jean brands. Why does it matter that other people are also thinking in a similar way?” So I loved that perspective. I needed that perspective to understand, “Oh, of course. We can do exactly what we want. It’s still going to be unique in its own way.” But we, for a long time, thought we were going to launch with cottons. We thought we might be able to produce our sheets in the U.S. We thought we would be able to have a different path. There were suppliers that we thought we were going to launch with and nearly did and then things fell apart at the last minute. There were a lot of hiccups along the way. And the one thing that we knew 100%, from the start, was product was everything. We didn’t rush to push through any product that we didn’t feel confident about and we only launched with things we were really confident about.

Stephanie: [00:07:19] I think as more companies—just adding to what Michelle said—but I think, as more companies started emerging, for me, I found that really exciting. I was like, “Yes. We have a solid idea. This completely makes sense. It’s now just about making sure that we have a really strong voice and that our quality and our product is so strong.” Especially with my background, we tested everything. We wore it. We washed it. It’s about home laundry. It’s about how do you actually live with that item? And so, for us, originally, we thought we were going to have cotton and then we realized it didn’t live up to our standards. We washed it ten times. We slept on it, each, three times. We did all these crazy amounts of testing and then it just didn’t pass or we didn’t like how it felt after the 15th wash. It wasn’t as soft. It wasn’t sustainable or it wasn’t—it just wasn’t working out for us. And that’s kind of how we ended up with linen. And then we found these products that were actually testing it. We were trying to really make sure that it was still comfortable. It was still design-driven. It was still beautiful and it was a product that you could actually keep. I think a lot of times in fashion, you just go through it. Yes, there’s pieces that you want to keep but there’s some pieces that you just want in and out and we didn’t want that for our brand.

Richie: [00:08:28] Did you feel that the other brands in this space did not have that rigorous testing process? It’s interesting. You started almost saying, “We’re going to create something.” It started with that moment of creation and then, almost, it backed into solving the problem or whatever you want to call that. And there are, as you said, there are no shortage of these things. I’m curious how the calculus went to stand out and create above what you must have had in your home already because this didn’t exist when you built your homes also, right?

Stephanie: [00:08:59] I think other brands probably do the same—hope they do the same amount of testing. You just don’t know. But I think, because there are so many brands out there, we really wanted to make sure that our product was going to last. I had product at home where, three or four years, I’m like, “Oh, man. This doesn’t feel that great anymore. I need a new one.” Or, “I don’t like this color anymore. It’s changed so much by washing it. This one is pilling. This one is not soft enough.” And I think those are the reasons why we also created, is that the product wasn’t lasting how long I wanted it to.

Michelle: [00:09:28] I think we’re both really, really picky, probably to a downfall sometimes. But I think that was something we learned about ourselves from the get-go. It was like, “Okay, if this doesn’t pass our test, it’s not going to pass anyone’s test.” We didn’t know that about ourselves until we actually started developing. We worked with, I don’t know, at least 20 suppliers that we actually had begun the path of developing with and we just didn’t get where we wanted to get. So, in a sense, I think sometimes we have to remember that we’re way more picky than most customers and that there is a balance of, “Okay, if it satisfies you, hopefully it’s good.” But that’s just who we are. And I think we’ve learned a lot about what differentiates our brand through the process of creating our brand as unique individuals. And I would say, for differentiation, something that I didn’t know until we actually developed it was how, visually, we just have a voice. And I think that the visual voice of our products carry a lot of what our verbals actually don’t always do a great job with. I think I’m actually not the best at verbally explaining my company to people sometimes, which is not the greatest thing to say.

Richie: [00:10:38] Luckily we’re on a podcast.

Michelle: [00:10:39] Right, exactly. As the president of the company on a podcast. Here we are. But I do think that any time people see the brand, they go, “Oh, okay, I get it.” And that makes me feel really strong about what we are able to create and I think that speaks to our design backgrounds. We all collaborate when we do photo shoots, when we do any sort of art direction. We don’t hire people. We do it ourselves. And that’s, I think, remained strong and consistent for the brand to have that voice.

Richie: [00:11:05] So you mentioned before that there were almost two years of development before the launch. Was that intentional? Did you plan for it to take that long or was that just going down the rabbit hole to get to the place where you felt comfortable actually putting something in the world?

Stephanie: [00:11:17] No. It definitely took a lot longer than we thought it would.

Richie: [00:11:20] What was your original estimation?

Stephanie: [00:11:23] Probably a year. It was definitely two years of just testing the product. And then also, because of my background, I knew how things should feel, [what] the product could actually look like. And so sometimes the factory would tell us, “No, you can’t do that.” And I would be like, “No, actually you can. You have to do this process, this process and this process. You’re spending too much time with here.” I’m able to problem solve quite a bit and so, because of that—I don’t know if that was a problem or a good thing—it took us a lot longer to develop our products. Making sure and understanding that the factory was doing it the right way or the way that I wanted to do it to make sure that it’s a better product. Yes, it might be a little bit challenging for you but, in the long run, it’ll be easier and now they understand that. Or we had a lot of pilling and so I would tell them, “Okay, we actually need to do this process to help eliminate that” and they’re like, “No, it’ll break the fabric.” I’m like, “No, if you do X amount of minutes, it will actually be better.” And so it’s been a learning process for us and for them. It’s been really interesting that a lot of the clothing and the way that I process things in clothing also reflect back into actual homewear.

Richie: [00:12:27] It sounds like you kind of started with just making stuff. How did you know what to start with?

Stephanie: [00:12:34] Hmm.

Michelle: [00:12:34] I think—I’m gonna speak for you for a minute—I think we worked backwards from the end product. We knew we needed enough to make a lookbook, if I’m gonna say that, and we needed the bare minimum, basically, to make that happen successfully. And I believe that’s really how we backed into the linens and the blankets as the first launching place for a soft goods company. We just knew we needed enough robustness but, at the same time, we started small. We’ve had not a ton of investment. We’ve tried to grow sustainably. So it was a calculation of what we could handle and how we could get to the point that it looked robust without being too much.

Richie: [00:13:13] And then, over this time, because you’re obviously developing the aesthetic in tandem with the products, verbally describe what was the goal there. Or where would this land aesthetically between cookie-cutter, marginally soulless, just direct-to-consumer, private label and then you have the super designer-y, more emotional stuff? Where on that spectrum did you want to end up?

Michelle: [00:13:36] We always wanted to end up appealing to a design-conscious audience and that, for us, put us in a place where we cared about the colorways. We cared about the imagery. We obviously cared about the product. We’ve discussed that. But then we needed it to be able to look, I hate to use this phrase because I think it’s sort of a cop out, but it’s almost like a California look. We involve nature in all our photo shoots. We try to make it seem breezy. The aspect of linen is that it’s pretty laid back in general so there was a calculus of that’s what we wanted, that’s who we are, that’s how we use the product and how we live. I actually don’t think we worried a lot about any of the bigger, as you say, soulless or more direct-to-consumer models because we never saw that as actually a future competitor. We always felt like, as we were able to grow and as we were able to show more of ourselves through our products, we weren’t going to be competing with them. We weren’t just direct-to-consumer. We weren’t trying to cut out the middleman or do things that just spoke to, “Here’s a better product at a cheaper price.” That was never really our mission. So it didn’t feel like something we worried about too much, to be honest.

Stephanie: [00:14:46] I also hate this word “cool.” I think we wanted it to be very design-driven, design-conscious. We wanted it to look cool for consumers like us but I also didn’t want to be pretentious. Sometimes it can either be really boring or too pretentious. We wanted to be very warm, obtainable and understanding that you can still have fun in your home. I know you’re investing into these pieces. Not everything has to be white, grey or beige. You can add pops of color into it. I think that’s what we try to do and to show people that.

Richie: [00:15:20] So you spend almost two years developing. Where are you at the end of year one in that development process? What’s done? What isn’t? What’s still to be completed? How do you assess, in retrospect, where that was?

Michelle: [00:15:33] I think at the end of year one we were disappointed.

Richie: [00:15:35] Why?

Michelle: [00:15:36] Because, obviously, we weren’t where we might have thought we would be. I, for one, had to constantly remind myself to just be patient. I was definitely still working. I was teaching. I was still working in architecture and it was a hard process. I think starting, for me, was actually much harder than having the business and having to go through that split time, self-doubt, not knowing if it’s really going to work. Is it going to happen?

Richie: [00:16:02] What is this?

Michelle: [00:16:03] Yeah, exactly. And I think that just staying focused and continuing to believe in it. You have to have that belief otherwise you won’t get through that phase.

Stephanie: [00:16:12] At year one, in my mind, I knew exactly what products we were going to do and it was completely the opposite. We had one supplier that was great and then minimum wage went up in LA and so we had a sit down meeting about, “This is what your product’s gonna cost now. Your margins are really low. In four to five years from now, it’s gonna cost X amount. You’re not gonna be able to afford any of these items.” We were also trying to fill container ships, pretty much, with fabric to bring down to LA to sew and we couldn’t find the correct machinery. I had a lot of people that told me, yes, they can sew these items for me, they can wash these items for me. But then realizing that the tables from clothing to home is completely different. They need to be bigger. The sewing machines, the sides of them have to be bigger. Everything has to be bigger. The cutting tables, the actual washing machines. And so, pretty much, what I thought was going to happen at the end of year one, we almost got there month nine and then scrapped everything in two to three months after that. So it was pretty devastating. But, knowing what could happen, I was still quite positive in that. Also, mentally, it was exhausting. We were working 12-hour days and then coming home and then trying to work from eight to midnight to two in the morning. It was also really difficult.

Michelle: [00:17:27] Steph was way better at the early phase than I was. You’ve been through the product development process and I hadn’t. So I was like, “Oh, it might never happen. What are we doing?” It was just hard to really continue to believe in it but, at the same time, once you’ve gotten that far, well, you’re not giving up now.

Richie: [00:17:42] Right.

Stephanie: [00:17:42] And I think that’s a lot of owning a business is you’re going to run into problems over and over and over again, in many different ways, and nobody else is going to solve them except you so you just have to keep going. You figure it out. You find a way.

Richie: [00:17:56] So talk us through year two of the development, in terms of, you’re at the one year mark. Stuff isn’t exactly as you want it. What brings you, basically, up to the launch?

Stephanie: [00:18:04] This is, I think, where I was pretty desperate. So I pretty much told all of my friends and everyone [whom] I knew or anyone [whom] I worked with and I was just reaching out to everyone possible. We finally got a contact for our linen and that felt like a homerun. It felt amazing. I also maybe had so many doubts at that point that we probably tested that product too long. But the good news is, while we were testing that one, I reached out to an old sweater supplier who actually made blankets for us and so that’s how we found another contact. Then we found another one in Peru for alpaca blankets and that just started rolling. The linen, I think, was our first big shot where it was like, “Yes. This is actually going to happen.” And, because we were so nervous, it allowed us to give us some more time to search out for other products and then give us some time to actually think and breathe. So, even though we had the product maybe three months into the second year, we still tested it, probably, for another three to four months or three to six months and, during that time, that’s when we’re trying to find the other products.

Richie: [00:19:06] So, throughout that testing, how do you know it’s done? Because, it’s always like this for any creative, and then you look back and you’re like, “This was never done” even though you released it. How do you, internally, figure that out?

Stephanie: [00:19:16] So, in my head, I pretty much put it in two stages. I did the initial stage of, “Okay, let’s give it to Michelle and James and then we’ll keep one set. How do we just initially feel about it?” And then we would go through the process of, “Okay, let’s wash this how a normal person would wash it.” That’s kind of what James and Michelle did. And then I would wash it where I was that eager customer that would wash it every single night for three months and see how it goes. I pretty much split it up in between two stages of, is this even worth testing versus what is okay and pretty much stopped it from there. But it was constantly of asking James and Michelle, “How does it feel? Does this feel good? Okay, fill this format for me please. Rate it one through ten. Would you sleep on this? Do you like it?” I was kind of the brat where I didn’t trust them. And so would I ask them again, “How do you feel about it now? Here’s the next week,” and constantly asking them. My poor husband, I made him do the laundry morning and night. I just had to keep washing and washing and washing. So I probably tested it, maybe, too much. I definitely would change the process where it’s a little bit more obtainable. But it was definitely a fine line. I think, just because it was our first product, I wanted to make sure that it was good.

Richie: [00:20:26] Was there a moment when you’re like, “Okay, we can give this to other people [who] aren’t us?”

Stephanie: [00:20:29] Oh, yeah. I think even week two I knew that but I was like, “No, let’s just be cautious and keep pushing.” But definitely week two is when I was like, “Okay, this product’s going to last. It’s going to be good.”

Michelle: [00:20:38] I would say we had a lot of spreadsheets going on about testing and weeks and wash numbers and feel and color. I’m happy, I’m thankful we did that. I think it was a good thing to do. Looking back, it was a little crazy but it makes a lot of sense and we felt so confident when we launched that our product was good and, I will say, it’s good. We’ve always had good feedback about it. We don’t have a ton of returns because the product’s bad. That process was really worth it for us as a company.

Richie: [00:21:07] Okay, so you’re working up to the launch. How do you figure out “what does launch look like”? What’s the goal? How does that whole idea come together?

Michelle: [00:21:15] It was sort of a hot mess. I, essentially, just started to put the pressure on everyone. Otherwise I felt like it was never going to happen. We had set a date for late summer, early fall. It ended up being October.

Richie: [00:21:29] And this is 2016?

Michelle: [00:21:29] This is 2016, yeah. And I had quit my job about six months before so that definitely was putting the fire in me of this has to happen. And, at that point, it was just working backwards from the end goal. We ended up—we had a first photoshoot that was a three-day long mess. We had no idea what we were doing. We just made it work. In retrospect, I think it went great actually. We learned a ton. But just all that stuff that we knew needed to happen and we just started scheduling it. I had never built a consumer product website. I wasn’t doing it myself, obviously, but that was a little bit more of a hurdle than I think I anticipated. There [are] incredible tools. We are on Shopify. So you think it’s going to go fine because a lot of people do this but it definitely took time. We were very picky about the graphics, the look, probably more than we needed to be, again. But all those things we just put a date. We aimed for a goal. We were a little behind that goal but not by much. And I think, unless you just decide, “Okay, that’s when it’s happening,” you don’t ever get to really hustling towards a date.

Richie: [00:22:29] Was this intended to be a digitally-native brand? Did you know you would be selling online? How did that piece develop as well?

Michelle: [00:22:35] We assumed it would be a digitally-native brand and we allowed flexibility in some of the products to go beyond that. But I don’t think we understood that, being a soft goods company, we actually really would also benefit from physical touch points. And that became clear pretty quickly. A couple of months in we got people asking if they could wholesale, some stores that we thought were wonderful and we would be thrilled to have our product in. So, as that developed, we definitely made room for physical touch points to actually help establish, validate, grow the brand. And that’s been really good for us because we don’t have the same kind of marketing budget that a lot of other companies have. So being able to have people see and touch and feel the product and really be won over by it in person helps us a lot, I think.

Richie: [00:23:27] So how did the launch go?

Stephanie: [00:23:29] I think the launch was cautious.

Richie: [00:23:32] What does that mean?

Stephanie: [00:23:32] Neither of us, none of us had ever launched a product company. We worked with a PR team but, beyond that, we didn’t work with a lot of other, I would say, professional consultants to help coach us through this launch. So, even in small ways, we were nervous, for sure, about just making sure we were getting it right. So we weren’t trying to have the biggest launch possible ever. I think it was a balance between getting ourselves out there, getting the name out there but also being a little cautious about just making sure we didn’t make some huge mistake that then we would have to recover from.

Richie: [00:24:08] And so you launch it now. How many products exist at the launch?

Stephanie: [00:24:11] So we had about five duvet colors for linen sheets and then we ended up adding five to that. And then we had to pop pillowcases and then we had about three to five blankets. The reason I say three to five is because on the website, we first had three and then we did a lot of wholesale and trying to make sure that it was quite different. So that was our beginning assortment. We wanted to make sure that we could introduce a blanket two months after we launched and so we wanted to make sure that we had extra reserves. And then also, even with the linens, we added an extra pop color in a couple months later.

Richie: [00:24:44] Okay. So this things out in the wild now. It took two years to get there and a ton of hard work. Where do you go from there? What’s the plan? Is it add more products? Is it grow the audience? Is it both? Is it more?

Stephanie: [00:24:55] It’s definitely adding more product and also making sure that—we’ve realized that a lot of people love our brand and want to be able to be a part of it. But we need to start introducing a little bit more price point-friendly items. So we’re developing cotton blend blankets. We’re making sure that we have a little bit lower price point items. Also we’re doing really well with blankets. We’re doing really well with linen too, but we didn’t know how well the blankets would have done or were doing. And so now we’re developing a little bit more heavily into that. By saying heavy, I just mean maybe 30% more than what’s currently on the website. And so we definitely want to make sure that we also grow into other home products. Definitely more home textiles. We want to have more pillows. We want to even have a candle. We want to definitely grow it. I’m just looking for more assortment.

Michelle: [00:25:42] I would say year one for us was a lot of inventory management. When we launched, we knew we had an assortment of products on hand that we would then slowly release. We had things for the future. So we weren’t worried about rushing to get new products out. If anything, we’re still in the place where, I think, it benefits us more to have more people know we exist. So it’s a balance for us between actually trying to get our name out there and then trying to continue to release new products. I’d say we’re still more in the phase of trying to get our name out there.

Richie: [00:26:14] And so that kind of brings us to the end of 2016 into 2017. If you talk through last year, what was the thinking of that year or some of the highlights and then we’ll work our way up to the present?

Stephanie: [00:26:23] I feel like I barely remember 2017. I had a child during all this madness. And so I used to be able to work way longer hours and then, having a kid, it really does change everything. Surprisingly, it was a really great year towards the end but I think, just having a kid, it just really messed with my mind of not knowing what was happening. My mind was so forgetful and so I thought we weren’t doing that well is what I thought just because I wasn’t 100% in. And Michelle was great about that. She definitely covered for me and was just managing pretty much the entire business at that point. I think that 2017 was definitely the year, for me, [when] I realized this is actually going to work. And, yes, it had been working but it was finally the year where the sales were growing. Michelle was doing all the projections and we were actually hitting them, where that didn’t make sense to me. I was like, “This is actually happening.” 2017 definitely gave us the insight to plan for 2018, 2019, 2020 where I’m gonna fully work on Morrow and quit my day job. I’m gonna make sure that these are the new products that I want to add. So, for me, 2017 was the eye-opener. Towards the end is when I actually realized, “This is going to be our new life. This is great.”

Richie: [00:27:38] What caused that realization to happen? Was it purely sales driven? Was it feeling driven? Was it customer feedback driven? What causes you to flip the switching and go, “Oh, this is actually is a thing now?”

Stephanie: [00:27:48] I think it was all three. I have really high standards. I’m quite picky. Even packaging. Sometimes I don’t buy products if I don’t like the packaging, which sounds horrible. And so when we got a lot of customer feedback that wasn’t our friends and it was random people [whom] we didn’t know and when they were reordering the second time, the third time, that’s when it was like, “Okay, this is actual great confirmation for me.” Also, even finally towards the end of the year, we were doing a couple of fairs and we were having a couple of pop-up shops. The customer feedback from that and also seeing how people were interacting with our product, it just gave me concrete evidence of this is actually working. And also sales. Sales [were] a huge thing for us. In the end it’s like, “Okay, cool, people in Texas I don’t know or people in Florida are buying our product that we don’t know anyone from.” That was amazing.

Richie: [00:28:35] So how did you go about building that audience? Was it purely a press thing? Was there advertising? Was it many—it sounds like there were pop-ups and retail and so forth.

Michelle: [00:28:42] There was, I would say, a lot of experimentation. There still is. We began doing some conservative online advertising. I would say we were doing Facebook advertising that really wasn’t working. We stopped doing that. I mean it’s an easy way to just go through so much money and annoy people. But it became clear to us that people did like the product when they discovered it so we did try to respond to the wholesale. We were getting a lot of wholesale interest. It wasn’t, necessarily, something that we actually wanted to pursue. We’re still, I would say, really picky about which wholesale accounts we want to work with and how we go about that because we do take a margin hit when we do that and we really see these kinds of retail outlets as partners. They’re helping us grow. They’re helping us with establishing our brand. They validate us. So that part we ended up, I think, leaning into and accepting, “Okay, this is actually great for us.”

Michelle: [00:29:34] And then we did work with press. We definitely were trying to use press to help us. It always kind of surprised me that we would get press. That’s such a silly thing to say but I think you’re so deep in it you forget there’s value to what you’re doing in the way that Steph was saying, “I’m shocked when strangers order our product.” We’re still thrilled. There’s a joy that comes from building something, growing it and putting it out into the world and having people respond well. So we basically tried a bunch of experimentation. We don’t do a ton of online marketing, digital marketing. We do some but we have learned not to try to use that as really the only growth method. For us, it didn’t work. I think for lots of other products it really does work. Our price point’s relatively high and our product is relatively, I would say, design-driven. It’s not an apples-to-apples comparison about technical specs and price. So we don’t do things like sell on Amazon. We’re not interested in doing that. A lot of different sales channel opportunities have come up that we’ve turned down because we don’t feel like our brand can actually be expressed through those. So it’s a learning experience. We’re still learning but we have had strong growth in a way that we didn’t predict or expect. Meanwhile Steph’s in baby land and I’m just sweating it out over inventory. We’re still, I think, struggling with inventory as just a pain point. It’s hard to predict our future and we’re very lucky to be able to say we have a lot of growth and so we were constantly running out of things and then trying to reorder and trying to deal with cash flow and all that stuff. But we’re feeling confident now going into the future and developing for the future and planning to be able to sustain growth.

Richie: [00:31:15] So how do you figure out how big this can get, should get and you want it to get? And maybe how did that evolve, if it did, as you have been building?

Michelle: [00:31:25] It has definitely evolved. We have always, I think, had some numbers in mind of what it could be. And, truth be told, I think people start businesses for all sorts of reasons. We definitely enjoy life, want to enjoy life, want to have a balanced life. And so I don’t think we’re just all in. I don’t think it’s about making as much money as we possibly ever can. We’ve never actually really thought about exiting. That’s not something that was ever on our mind from the start and we’ve avoided doing big investment from private equity or from venture because of those pressures. And we’ve actually wanted this to be able to grow and sustain ourselves, I would say, slowly and comfortably. I don’t think there’s a ceiling on it yet in our mind. I would say we can see five years into the future and we have vision for that and I’d say maybe our visions far beyond that are a little looser, but they still exist. We’d love to be able to open retail stores. We would like to be able to grow the physical touch point aspect of the brand as we move forward.

Richie: [00:32:32] And so, on that note, how did you think about or practically figure out how do you fund this thing? It sounds like you had some intentional decisions you made about what to do, what not to do. But how did that come about and evolve?

Michelle: [00:32:42] That’s been a tricky subject. It still is. So we have not wanted to lose control and that’s something that we knew early on. We are, obviously, picky. That’s something we’ve discussed about our personal downfalls, but we never wanted to put ourselves in a position where we had outside pressure that was going to sacrifice the brand that we’ve built or the quality of the product that we’ve worked hard to protect and build. Essentially, we basically were lucky enough to find an angel investor [who] helped us begin and we’re still working with that investor to fund and sustain growth. We definitely have a model that is slower growth than most private equity or venture capital would ever be comfortable with. It’s obviously risky but, in some ways, I think we’re doing everything we can to try to protect that risk. Of course, it’s risky.

Richie: [00:33:35] But it also could be less risky. You see a lot of things that go up and they fall as fast as they rise.

Michelle: [00:33:39] Right. Yeah. We want to avoid that.

Stephanie: [00:33:43] That’s something we definitely want to avoid. We want to make sure that we’re not just a fad and that everyone knows about us and we want to make sure that we’re definitely here for the long run and that everyone can see us as a design-driven company. We just didn’t want it to be in and out. That was a big thing for us.

Richie: [00:34:00] So talk a bit about the price point side in terms of you said a few times that you were not price point driven but more design-driven. That also can get out of hand really quickly to a point where you’re an art project, the extreme. So how do you control for that or figure out who this customer is and how does that get priced? And then, given your online also in wholesale, that you’re still making money?

Stephanie: [00:34:22] What we try to do is, “Okay, what do we want the price of the item actually to be?” And I give myself a range. This is the low ball of that and this is the cap of that and if it’s past that cap, I won’t go into it. I do whatever it takes of asking multiple suppliers and manufacturers of, “Can you do this? Can we do that? What happens if we just sub out this yarn?” I’m constantly working with them but if it gets to the point where it’s not going to happen, we just push away from that. And so it is a fine line. I do think that we’re both design driven but we’re also smart. We understand that we still need to make profits and margins and so we’re conscious of that.

Richie: [00:34:55] If you translate that price point into a customer or customers, who is that person or people?

Michelle: [00:35:01] It’s interesting. We assumed that the customers were like us when we started the brand. I think that’s a mistake or a trope that everyone falls into. Our customers are pretty varied. I would say they’re all pretty high income, which maybe we underestimated that aspect of it and that’s something that Steph mentioned earlier about us trying to design some lower price point items. We think we have priced our products very well for the quality that they are and the longevity you get and for what they actually are. But, when you look at the marketplace landscape, we’re still obviously in the higher end of price points. So the customer is often on the coasts. The customer is pretty high end and I think the customer is actually older than we anticipated at the beginning.

Richie: [00:35:43] And so you mentioned offline retail a few times. You launched online but talk about what your thoughts were in terms of the physical manifestation of this, how that’s evolved, what the experiments have been and so forth.

Michelle: [00:35:55] I don’t think we really had any robust conversations about wholesale before we launched. We had very few and we knew that we would make room for it in certain products if it came up for marketing purposes. It wasn’t something that we tried to grow and we tried to build. And we’ve had a strong response to it. I think, in a sense, because some of the products, particularly the blankets, are really nice gifts and so they actually do well in stores. We, at the beginning, as we were getting wholesale interest, we weren’t sure if it would last. We weren’t sure if these stores would come back and make repeat orders. We actually really couldn’t see it as a chunk of the business. So I would say, right now, it’s about 40% of the business and still about 60% direct-to-consumer. So it’s a healthy part of the business but it’s not the majority and we’re comfortable with where it’s at. I think we’re, in the future, predicting more growth in the direct-to-consumer side, not the wholesale side.

Richie: [00:36:49] And then have you done any other pop-ups or any stuff that’s fully yours yet or is that something in the future?

Michelle: [00:36:54] No, we haven’t done our own pop-up just on our own. We’ve done a few little store in store type things but, no, we haven’t had our own store yet.

Stephanie: [00:37:03] I think that’s definitely in the future. I love the idea of doing a pop-up or a store front, only to show exactly what our vision is and how to dress a bed and how easy it is. It’s funny that sometimes we get, even through friends, questions about, “How do you add these pillowcases onto your bed?” And we’re like, “Well, it’s actually really easy. Just add the Moss Green or add the Sahara Yellow.” So I think the pop-up would be really important for us to make sure that people can understand what our concept is and to be able to actually feel everything. Everything’s really soft and really worn in and we try to tell people that and it’s kind of hard to explain that through images. You actually need to touch it.

Richie: [00:37:39] How have you approached that problem on a website?

Michelle: [00:37:43] We’ve tried to explain what makes our product special. So we do have, I think we have a page that says “About Linen” and “About Alpaca” and we’ve tried to actually detail out what it is that makes our product unique but it’s hard to explain. And I think one of the things that maybe is evidence of our visual communication is, what Steph was just saying about how a pop-up would be useful for us, because when we do wholesale, people are not necessarily styling the products the way we would. Rarely, actually, are they styling products at all. There’s almost never a bed. We don’t do a lot of linen wholesale. So it’s an interesting thought that we could then show people how they want to do it.

Michelle: [00:38:19] I will say I was shocked. After the first photo shoot, we did a bunch of lifestyle rooms and pairings of different things and we did some creative styling of the beds. People will buy exactly what is in the picture and I did not see that coming. So we actually, in some ways, can control a little bit about what we sell or what pairs with this or if maybe that color is not doing well, we can do a photo shoot that puts it with something else that’s complimentary. So it’s actually kind of been interesting. People have responded to the visual imagery we’ve put out there and they will actually buy what we style which I still think is thrilling.

Richie: [00:38:55] What’s been the cheapest and most expensive lesson both you have learned? And you can’t answer the same thing.

Michelle: [00:38:59] Do we both have to pick a cheap and an expensive one?

Richie: [00:39:02] Yes. That’s the benefit of having both of you on the podcast.

Michelle: [00:39:05] Okay. For me, the most expensive lesson I’ve learned is choose [whom] you work with wisely.

Richie: [00:39:10] You’re talking about the person sitting next to you?

Michelle: [00:39:12] No, I’m actually—no, we’ve been super lucky about the people in our company. I’m talking about consultants. There were a few consultants we hired early on [whom] I didn’t necessarily love, but had come so highly recommended and seemed really good at their jobs that I thought, “Okay, great. These people are obviously good at their jobs even if they’re not my favorite people to work with. That doesn’t matter.” I think I realized it really does matter and I have all the control, so what am I doing working with people [whom] I don’t love working with? So I think there were a few consultants [who] just early on weren’t working out. I let [them] linger too long thinking it was my fault, that I wasn’t managing the relationship well or that I wasn’t finding good ways to communicate with them, whatever it was. Finally, I realized, “No, man. You’re done.” And that, I think was an expensive lesson. And so we’ve had wonderful, wonderful relationships since then and I’ve been really intentional about anyone that we work with as consultants to be people [whom] we want to work with.

Richie: [00:40:08] What about cheap?

Michelle: [00:40:09] Cheap I would say, for me, is just feedback. Being able to actually hear what people have to say has taught me a lot. And it doesn’t cost anything. Early on, I think I realized as many possible places as we could hear customer feedback would be really valuable and it has been.

Stephanie: [00:40:26] I think, for cheap, would be the community. I was really shocked and surprised about how people were willing to help us. Even our photographers. We thought we wouldn’t be able do a photo shoot in Joshua Tree. They were just like, “No, we can do it. We’ll just take these two bands out there. We’ll set up a bed.” It just all worked out naturally. The most expensive one would definitely be some of our product that it took us so long to develop. So maybe it’s not just about the actual costs of things but it’s also the time of things. We’re trying to be very conscious of it’s Fair Trade, [whom] it’s going to, but sometimes [with] the product, the first couple rounds are pretty bad and understanding when to stop that and, instead of hearing the voice of them being like, “We can do it again. We can do it again and we can do it again” and kind of feeling bad and just that give and take. So, in the end, it actually cost us quite a bit in product development and doing the back and forth, seeing three to four protos for three to four pillows. And then, also, the time consumption. It just took so much of our time and I did whatever it took to try to make that relationship work and knowing that it wasn’t going to happen.

Richie: [00:41:33] And how big is the team now?

Michelle: [00:41:34] The team is us and then we have consultants. I’d say maybe five people [who] help us in that way.

Richie: [00:41:42] Do you like the size that it is now?

Michelle: [00:41:44] Yes and no. I love that it feels pretty low key and mellow in many ways. It’s us. We can be quick about making decisions. It’s easy to discuss things. We don’t have to have huge meetings and lots and lots of input. But I’m looking forward to when we can be bigger.

Richie: [00:42:02] Talk through if you look one, two, three years ahead, what’s on the horizon? What are you most excited about? Also maybe what are you most uncertain about as well?

Michelle: [00:42:09] I’m very excited for growth. I think Steph had mentioned we were surprised by 2017. We’ve had a strong start to 2018. I think we’re starting to feel more confident about, okay, this is really growing and we are settling into that. So I’m really excited to be able to, now, meet those demands. I think I’m uncertain about, I would say, just managing that growth. I mean we’ve obviously never done this. We only know what we know and, otherwise, we’re making projections and we’re trying to envision a future in which what has happened continues to happen which is just not always how the world works. So I think the uncertainty of the nature of sales and consumer relations is scary.

Stephanie: [00:42:55] I think that’s the big one. Inventory is kind of a hard thing for us. I think the first half when were selling, we had one color that was blowing out and so, when we reordered, we focused on that color when it was actually a different color the next following months. Because we don’t have history, it’s really hard for us to help project what it’s going to be. Yeah, the numbers are hitting our projections but not their actual inventory. And so that’s sort of a huge guessing game and that’s where we’re definitely going to be struggling and need to focus on.

Michelle: [00:43:22] I would even say, weirdly, there is no consistency for us between whether Queen sells more or King sells more. It’s so bizarre. In different colorways, only Kings sell. In other colorways, only Queens sell. It’s actually so bizarre. And that’s something that I just assumed we would actually find consistency in and that’s one of the things we just don’t have. We’ll be sold out of a certain size and color. And then there’s plenty of the other size and that’s just the way it goes.

Richie: [00:43:49] And then, where’s the name from?

Michelle: [00:43:51] The name was a long process, as was the whole launch. The name—we thought we were going to launch with a different name. We had done an identity for this other name. Long story short, the trade commission put the kibosh on that. So we ended up starting from scratch again. At that point, we were much less precious with what the name was going to be because we basically knew the brand already. This was probably, I don’t know, almost six months before launch, something like that, that we switched the name. So the name—we were looking for M names. We had this logo that we thought was based around an M from this previous name and that was how we ended up with Morrow. But we were actually out to dinner and Scott, Steph’s husband, was eating bone marrow and he was like, “Marrow’s a nice word.” And then we thought, “Yeah, but that’s kind of neither here nor there.” And then he’s like, “What about Morrow?” And we’re like, “That’s not a word” and he was like, “Yes it is.” And then we put it on the list. We had a lot of words on the list. We put it on the list. We knew soft goods was going to be in the name from earlier. So that stuck. And then morrow ended up really working. I think a lot better than the original name would have ever been.

Stephanie: [00:44:59] And then we loved the idea of tomorrow, waking up in your sheets. So it fell perfectly into it whereas looking back on the first name it just wasn’t even us. It’s crazy how it worked out. We even ended up changing our entire logo, branding, everything completely to to go back morrow.

Richie: [00:45:16] Awesome. Thank you so much for talking.

Michelle: [00:45:17] Thank you.

Stephanie: [00:45:18] Thank you.

Richie: [00:45:23] Thanks for listening to the Loose Threads Podcast. You can read full transcripts of the podcast and join the newsletter at LooseThreads.com. Feel free to leave a review on iTunes. We always appreciate it. And thanks to George Drake Jr. For editing this episode. We have a great roster of upcoming guests including Holly McWhorter of Plant Apothecary, Ariane Goldman of Hatch and Jackie De Jesu Of Shhhowercap. Thanks for listening and talk to you soon.